New Financial Year 2025: Tax Changes, UPI Payment Rule Updates from April 1

As the financial year draws to a close today, significant policy changes are set to take effect from April 1, 2025. These updates encompass various sectors, including taxation, digital payments, transportation, and trade, affecting individuals, businesses, and the broader economic landscape. With revisions to income tax slabs, UPI security protocols, credit card reward structures, and toll rates, taxpayers and digital payment users must stay informed to navigate the shifting financial environment.

Furthermore, April 2 marks the deadline for reciprocal tariff decisions, potentially impacting global trade dynamics. Investors, commuters, and consumers will need to adapt quickly to these new policies to optimize financial planning and mitigate cost increases. Here’s an in-depth look at the most crucial changes taking effect from April 2025.

Income Tax Slabs Overhauled: Who Benefits from the New Regime?

Starting April 1, the revised income tax structure aims to simplify taxation while providing relief to middle-income earners. As announced in the Union Budget 2025, significant changes to tax slabs and deductions will take effect:

• Individuals earning up to ₹12 lakh per year will now be exempt from income tax.

• A standard deduction of ₹75,000 has been introduced for salaried employees, ensuring further tax benefits.

• With these revisions, an annual salary of ₹12.75 lakh effectively becomes tax-free under the new regime.

• The updated tax slabs focus on reducing financial stress for the working-class population while maintaining fiscal stability.

These changes are designed to stimulate consumer spending, encourage savings, and streamline compliance procedures. The government has emphasized that this taxation overhaul aligns with India’s long-term economic objectives of increasing disposable income and fueling domestic consumption.

Taxpayers earning up to ₹12 lakh annually will benefit from full tax exemption, while salaried individuals can leverage a higher standard deduction.

Stricter UPI Regulations: Why Updating Your Mobile Number is Essential

With digital transactions on the rise, new security measures for UPI payments will be implemented from April 1. The National Payments Corporation of India (NPCI) has introduced updated guidelines to enhance security and prevent fraud:

• Inactive mobile numbers linked to UPI accounts will be deactivated.

• Users must ensure their registered phone number is active to avoid disruptions in digital payments.

• Banks and third-party UPI service providers (such as PhonePe, Google Pay, and Paytm) must now monitor and phase out dormant accounts.

• These security measures aim to reduce financial fraud, unauthorized transactions, and identity theft in the digital payment ecosystem.

Given the widespread adoption of cashless transactions, consumers must proactively update their details with their respective banks to ensure uninterrupted UPI access.

UPI transactions from inactive mobile numbers will be restricted to enhance security and fraud prevention.

Credit Card Rewards Restructured: Changes Impacting SBI and Axis Bank Users

Several banks have announced modifications to their credit card reward programs, impacting users who depend on reward points for travel, shopping, and cashback benefits:

• SBI SimplyCLICK and Air India SBI Platinum Credit Card users will see changes in their reward accumulation structure.

• Axis Bank’s Vistara Credit Card will undergo updates following Vistara’s merger with Air India, leading to revised travel-related perks.

• Some spending categories may no longer qualify for reward multipliers, affecting how cardholders maximize their benefits.

• These adjustments are being made to align rewards with evolving consumer spending patterns and business strategies.

Credit card users should review their revised terms and conditions to adjust their spending habits and maximize benefits accordingly.

SBI and Axis Bank credit cardholders should be aware of reward program changes affecting travel and retail spending benefits.

Toll Rate Increases: Higher Costs for Commuters and Logistics

Starting April 1, revised toll rates on highways will impact commuters and logistics firms. The National Highways Authority of India (NHAI) has introduced:

• Higher toll charges across key expressways for private vehicles, commercial transport, and freight carriers.

• The new rates are expected to increase daily commuting costs, especially for those using national highways for long-distance travel.

• Annual revisions in toll fees may be implemented based on inflation and infrastructure maintenance expenses.

• Higher logistics costs could potentially impact the prices of goods and services, indirectly affecting consumers.

Frequent travelers and transport businesses must reassess their budgets and travel strategies to accommodate these increased costs.

Toll fees will rise nationwide, affecting commuters and increasing logistics expenses for businesses.

Reciprocal Tariff Deadline: Potential Trade Shifts on April 2

April 2 marks a crucial deadline for India’s reciprocal tariff policies, which could influence import-export prices and trade partnerships. These tariffs are being revised in response to global economic shifts and trade tensions:

• Indian businesses engaged in international trade must stay updated on potential tariff hikes.

• Sectors such as automobiles, electronics, textiles, and agriculture may see adjustments in import duties and export pricing.

• The government is reviewing how these tariffs impact domestic industries and foreign trade relations.

• Higher tariffs could lead to inflationary pressures, affecting product prices and consumer demand.

With global trade dynamics shifting, businesses will need to adjust pricing strategies and supply chain management accordingly.

Businesses should monitor reciprocal tariff decisions that may impact trade costs and pricing strategies.

Last-Minute Tax Planning: What You Can Still Do Before March 31

As today marks the last day of the financial year, individuals and businesses have a final opportunity to make tax-saving investments before the deadline. Consider these strategies:

• Invest in tax-saving financial instruments such as ELSS mutual funds, PPF, NPS, and tax-saving FDs to reduce taxable income.

• Claim deductions on home loan interest, medical insurance premiums, and educational expenses before filing tax returns.

• Submit salary-related declarations to employers to ensure proper deductions and exemptions are applied.

• Verify advance tax payments to avoid penalties and interest charges.

Taxpayers should complete their financial planning today to avoid missing out on deductions and exemptions available for the fiscal year 2024-25.

March 31 is the final date for making tax-saving investments and filing necessary declarations.

Adapting to Financial Policy Changes in 2025

The start of the new financial year brings major economic and financial updates, requiring individuals and businesses to adapt to evolving regulations. With revised tax slabs, stricter UPI security rules, toll hikes, and changes in credit card rewards, staying informed will be essential for effective financial management. As India transitions into its next phase of economic development, these adjustments are expected to shape the financial landscape for the coming year.